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Furthermore, the industry has become overcrowded, with several new entrants vying for market share. But the fundamental weakness and overvaluation of many new participants make them risky bets for investors. In a reference to how the market values EVs versus traditional internal combustion engine (ICE (NYSE:ICE)) makers, Bernstein’s Tony Sacconaghi stated, “In 2014, they accounted for 15% of all BEVs [battery electric vehicles] sold. Today they account for 28%. However, even if they ultimately were to account for 50% of all EVs sold by 2030—which may be aggressive—it remains difficult to justify their current valuations.’’
Given this backdrop, we think it could be wise to stay away from EV stocks Hyzon Motors Inc. (HYZN), Lordstown Motors Corp. (RIDE), Vicinity Motor Corp. (VEV), and Ayro, Inc. (AYRO) now. Their sky-high valuations are not justified by their weak financials and growth prospects. Furthermore, these stocks were the worst-performing industry participants last month.
